How to Boost Your Portfolio with Top Finance Stocks Set to Beat Earnings
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
2 Stocks to Add to Your Watchlist
The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.
The final step today is to look at a stock that meets our ESP qualifications. Arch Capital Group (ACGL) earns a Zacks Rank #2 seven days from its next quarterly earnings release on October 30, 2023, and its Most Accurate Estimate comes in at $1.50 a share.
By taking the percentage difference between the $1.50 Most Accurate Estimate and the $1.48 Zacks Consensus Estimate, Arch Capital Group has an Earnings ESP of 1.37%.
ACGL is just one of a large group of Finance stocks with a positive ESP figure. Lincoln National (LNC) is another qualifying stock you may want to consider.
Lincoln National, which is readying to report earnings on November 1, 2023, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $1.80 a share, and LNC is nine days out from its next earnings report.
Lincoln National's Earnings ESP figure currently stands at 0.56% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.79.
ACGL and LNC's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
Find Stocks to Buy or Sell Before They're Reported
Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
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Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Lincoln National Corporation (LNC) : Free Stock Analysis Report
